I put a small ( 8' x 4' ) wall in beside our front door, to make a foyer of sorts. This wall has a portal in it that has an arched top. I used four layers of 3/4" particleboard between the studs to form the inside of the arch, as you can see in this photo album along with a shot of the final result.

This gave me the base to lay my 3/8" draywall against. I cut a strip of drywall the correct length and for the part that made the arch, I scribed the back of the drywall every 1.5" and snapped it on the scribe mark. This allowed the drywall to form around the arch. ( I couldn't get the drywall to bend by wetting it. It would always break. ) This piece was fitted in and wedged by the piece going across the bottom of the portal so that it was "forced" up into the arch and held in place. After all the cementing, sanding and painting ( and cleaning ) everything is finally finished! :) Thanks to the people here that answered my questions!